Pension providers will accept the pension contribution only if the pensionable earning for both employer and employee are equal. Pensionable earnings will be calculated based on the earnings basis (Qualifying Earning / All pensionable earning / Custom) set in the application. If earnings basis are set differently, that results in unequal amount of pensionable earnings and the pension provider in turn will reject the submission. So that our application will allow you to set earnings basis only for employee and the same will be automatically set for employer by default.
For example, if the employee's gross pay is £8,000(monthly) and deduction value is set as 1. Suppose the employee's earnings basis is set as 'All pensionable earning' and for employer 'Qualifying Earning' i.e. £6,240(Lower level of qualifying earnings) a month for 2020-21 tax year, the pension calculation will be :
Pensionable Earning (Employee) = £8,000
Pensionable Earning (Employer) = (£8,000 - £6,240) = £1,760
Employer/Employee pension contribution = Pensionable earnings * Deduction value
Employee pension contribution = £8,000 * 1% = £80
Employer pension contribution = £1,760 * 1% = £17.6
Since the pensionable earnings in this scenario are different for employee and employer, the pension provider will reject the submission.